Obama proposes spending cuts and revenue increases that would result in $1.8 trillion in deficit reductions over 10 years, replacing $1.2 trillion in automatic spending cuts that are otherwise poised to take effect over the next 10 years.

Translation: Because the poor, the elderly, the veterans and everyone who has contributed to Social Security and Medicare should have to bear the brunt of the cuts, not the well connected businesses who depend on Federal dollars to keep going.

In other words, the continuation of wealth redistribution upwards cannot be interrupted, citizen. now grit and bear it while the programs you've paid into your entire life are gutted to make sure a defense contractor can keep making useless toys so that Congressmen and Senators can brag about bringing jobs to their districts and states.

Aarontology:Obama proposes spending cuts and revenue increases that would result in $1.8 trillion in deficit reductions over 10 years, replacing $1.2 trillion in automatic spending cuts that are otherwise poised to take effect over the next 10 years.

Translation: Because the poor, the elderly, the veterans and everyone who has contributed to Social Security and Medicare should have to bear the brunt of the cuts, not the well connected businesses who depend on Federal dollars to keep going.

In other words, the continuation of wealth redistribution upwards cannot be interrupted, citizen. now grit and bear it while the programs you've paid into your entire life are gutted to make sure a defense contractor can keep making useless toys so that Congressmen and Senators can brag about bringing jobs to their districts and states.

Hugh2d2:"Social Security has nothing to do with the deficit."- Ronald Reagan

As appalling as it is to have to agree to something RR said, this is true.

Although chained-CPI doesn't sound like a lot of money to those who have enough right now, we should be trying to increase the SS benefits, not cut them. Seniors spend a disproportionate amount of what money on have on health care, which increases in cost far faster than inflation.

This is something Obama has been hinting at since before 2008. It should be a surprise to nobody except those who insisted on deluding themselves (both left and right) as to what he is.

FTFA: "You see, you don't change America by changing Washington - you change America by changing the states," [Brownback] said. "And that's exactly what Republican governors are doing across the country - taking a different approach to grow their states' economies and fix their governments with ideas that work.

Here in NC, the Publicans are cranking up the derp to 11. Amendment One, "tax reform" to shift taxes from the plutocrats to the rest of us, that establishment of religion resolution (which fortunately is kaput), two year wait for divorce, prescriptions for pseudoephedrine. All in the name of freedom and small government.

Once the change is fully phased in, Social Security benefits for a typical middle-income 65-year-old would be about $136 less a year, according to an analysis of Social Security data. At age 75, annual benefits under the new index would be $560 less. At 85, the cut would be $984 a year.

So yes, next month's check would be about $11 less if you are a typical 65yo.

Serious Black:vernonFL: How much would the average poor grandmother's Social Security check get cut? Would next month's check be $10 less?

No, its probably a very small change in the increase of the amount of the checks over years. Of course I DNRTFA so I could be wrong.

Also, Social Security isn't a program that is in imminent danger of collapse, we still have 20 or more years for that to happen, so its not like we really need to reform it now.

The longer we wait, the harder it is to ensure long-term balance.

Yeah, like with an asteroid - if you see it coming a long way out, you can just nudge it a little. If you ignore it and leave it to later politicians to sort out, they will probably do the same thing. And then when the asteroid is just about to strike earth you finally are forced to act at the last minute and nuke it and hope.

One thing to remember is that SS grows faster than inflation, so even if nothing is changed when it cuts back (to 75% of normal outgoings I think is the current plan), the actual payments will still be about the same, or even somewhat higher in real times than what a equivalent current SS recipient would be getting, so the doomsday scenarios that get talked about of "getting nothing back by the time I retire" are not based on reality.

The other thing to consider is that programs like SS always look bad when the economy is weak. In a few years time the US economy might be booming and suddenly the projections show the funding will be secure until 2080 or whatever, so it is a good thing to be careful not to overreact.

There really is no reason why Social Security is even being brought up in the first place. Social Security has NO involvement with the General budget. This crap is all Pete Peterson whispering like Gríma Wormtongue into Obama's ear.

And if Obama thinks this is all gonna be some cunning plan to make the republicans look bad because they won't raise taxes, he's already lost. All anyone will think of or remember was that Obama was the first Democratic President in History to use a grease gun on the slippery slope to eventually destroy Social Security.

Bravo Two:Grand_Moff_Joseph: Social Security can be fixed forever in one simple move: Remove the payroll cap on SS contributions.

/wipe hands on pants//repeat

This.

And this is also why it will never happen. Because the majority of Americans do not understand why the system is rigged for the wealthy. This cuts across both Republicans and Democrats. Both parties have wealthy backers who must be appeased.

Not sure about this one. The current talking point is that the reduction is 0.3% per year or an average loss of $ 42 per year to a recipient, and it doesn't invalidate COLAs, which are much more significant. Of course, that number will keep going down, so there will have to be something that levels it out. It would probably be worthwhile to provide means testing to the process as well. Social Security could be administered more effectively, but everyone seems to be averse to addressing complexities in a complex system.

But for what it's worth, it's a small bargaining chip right now - I'd like to see what the President can get out of it. If revenue can be found to cancel the sequester and offset the effects to better give short term stimulus to the economy, that would be something. Also, if tax code can be revised to generate more revenue and lower burden on elderly, as well as better management of the bottom line for Medicare, it's possible that the individual economies of the social security recipients will be more than offset.

vernonFL:No, its probably a very small change in the increase of the amount of the checks over years. Of course I DNRTFA so I could be wrong.

It's a classic "frog in the boiling water" scheme. The changes are small and barely felt at first, but year after year the missing money gets more and more noticeable. The longer you live, the hungrier you will get.

47 is the new 42:heypete: Bravo Two: Grand_Moff_Joseph: Social Security can be fixed forever in one simple move: Remove the payroll cap on SS contributions.

/wipe hands on pants//repeat

This.

[mahler.ca image 292x256]

I was going to say something like this. Why is there even a payroll cap on SS contributions in the first place? I honestly don't know what the reasoning was when it was instituted.

So that it could be sold not as a welfare plan but as a form of insurance or annuity. If as the system is set up you would have to pay out very large sums to retired billionaires if your removed the cap. You put a ceiling on the payout and remove the cap then you have effectively killed SS as it was designed.

Hmmm if Dems and Reps don't like it, there has to be a semblance of merit to the proposal. I'll have to read a bit more into it, but from the comments and links in this thread it doesn't look as if it a bad idea. I will, however, reserve the right to rage and sulk if this proposal hurts me in any way, shape, or form later on, especially if the damage was unforeseeable or introduced by other legislation far down the line.

CPennypacker:Serious Black: Grand_Moff_Joseph: Social Security can be fixed forever in one simple move: Remove the payroll cap on SS contributions.

/wipe hands on pants//repeat

Actually, per the CBO's work, it would push the trust fund exhaustion date out past the point most of us would turn 100, but it would not make the program sustainable forever.

How would you calculate infinite sustainability on a program like this?

The CBO was looking for sustainable solvency, which means that the trust fund maintains a positive amount throughout the entire 75-year window they looked at and that the trust fund was either stable or growing at the end of the 75-year window.

Saiga410:47 is the new 42: heypete: Bravo Two: Grand_Moff_Joseph: Social Security can be fixed forever in one simple move: Remove the payroll cap on SS contributions.

/wipe hands on pants//repeat

This.

[mahler.ca image 292x256]

I was going to say something like this. Why is there even a payroll cap on SS contributions in the first place? I honestly don't know what the reasoning was when it was instituted.

So that it could be sold not as a welfare plan but as a form of insurance or annuity. If as the system is set up you would have to pay out very large sums to retired billionaires if your removed the cap. You put a ceiling on the payout and remove the cap then you have effectively killed SS as it was designed.

Its still insurance. If you lose your income and pass the earnings test you can collect the maximum

vernonFL:How much would the average poor grandmother's Social Security check get cut? Would next month's check be $10 less?

No, its probably a very small change in the increase of the amount of the checks over years. Of course I DNRTFA so I could be wrong.

Also, Social Security isn't a program that is in imminent danger of collapse, we still have 20 or more years for that to happen, so its not like we really need to reform it now.

It would switch our calculation of inflation for SS increased to chained CPI which is lower than the current CPI that is used. Effectively CPI measures inflation via a list of goods and their prices over time. Chained CPI looks at a typical household and its balance of what it buys because of these changes. So in the long effect SS recipients would see their cost of living go down to match lock step with what your typical American as opposed to their SS staying up with inflation, it would match a typical households lost of buying power with wages not going up. In my opinion this may be a good thing.

47 is the new 42:I was going to say something like this. Why is there even a payroll cap on SS contributions in the first place? I honestly don't know what the reasoning was when it was instituted.

Because there is a maximum benefit. The person who pays into SS on a $10 million salary gets the exact same monthly benefit as someone who pays into in on a $100,000 salary. I'm not saying it's the most persuasive explanation, but that's the explanation.

Republicans ultimately have more of an incentive to weather the sequester then to reach a deal that includes new revenues, which would deprive them of their ability to rail about spending and force a greater focus wedge issues - such as immigration - that don't favor them.

Grand_Moff_Joseph:Social Security can be fixed forever in one simple move: Remove the payroll cap on SS contributions.

/wipe hands on pants//repeat

B-B-But then the wealthy job creators who can retire without needing SS will be forced to pay for other old people. Its only fair that the people who actually receive the benefits are the ones who pay into the system...Its also fair for the poor people who have paid into the system all of their lives to get reduced benefits and for them to have to wait two extra years to get them.

Serious Black:CPennypacker: Serious Black: Grand_Moff_Joseph: Social Security can be fixed forever in one simple move: Remove the payroll cap on SS contributions.

/wipe hands on pants//repeat

Actually, per the CBO's work, it would push the trust fund exhaustion date out past the point most of us would turn 100, but it would not make the program sustainable forever.

How would you calculate infinite sustainability on a program like this?

The CBO was looking for sustainable solvency, which means that the trust fund maintains a positive amount throughout the entire 75-year window they looked at and that the trust fund was either stable or growing at the end of the 75-year window.

Right but once you get to a certain number of years out the predictions get worse and worse. At what point is it even worth doing the calculation?

Uzzah:47 is the new 42: I was going to say something like this. Why is there even a payroll cap on SS contributions in the first place? I honestly don't know what the reasoning was when it was instituted.

Because there is a maximum benefit. The person who pays into SS on a $10 million salary gets the exact same monthly benefit as someone who pays into in on a $100,000 salary. I'm not saying it's the most persuasive explanation, but that's the explanation.

A max SS benefit to a rich person is chump change. A max benefit to a old or disabled NON rich person is the difference between life and death.

Grand_Moff_Joseph:Social Security can be fixed forever in one simple move: Remove the payroll cap on SS contributions.

/wipe hands on pants//repeat

If you do that, because payouts are calculated based on what you put in it becomes a full-on wealth transfer if payouts are still capped, unless you start monkeying with payouts at the end (which I'm fine with). For example, if you put in 10.2% of $200k for 20 years, but only get "credit" for having put in 10.2% of ~$110k, you lose out on ($408,000-224,400=)$183,600 in benefits.

Granted, if you made $200k for 20 years, you should have a healthier retirement plan than $184k anyway, but is means-testing SS a popular solution?

Uzzah:47 is the new 42: I was going to say something like this. Why is there even a payroll cap on SS contributions in the first place? I honestly don't know what the reasoning was when it was instituted.

Because there is a maximum benefit. The person who pays into SS on a $10 million salary gets the exact same monthly benefit as someone who pays into in on a $100,000 salary. I'm not saying it's the most persuasive explanation, but that's the explanation.

Essentially yes, SS is designed to mirror retirement savings. So the more you put in the more you get out, versus Medicare which is not, there is no cap, and what you put it shouldn't resemble what you get out.